February 22, 2018

Brazil's Biodiesel will go from B8 to B10 in March

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The amount of vegetable oil in Brazil's biodiesel fuel will increase next month. In the month of March, the diesel fuel in Brazil will go from a B8 blend (8% vegetable oil blended with petroleum diesel) to a B10 blend (10% vegetable oil blended with petroleum diesel). The Brazilian Vegetable Oil Processors Association (Abiove) indicated that the change would increase the demand for biodiesel by almost 30%.

The vegetable oil must be from renewable sources and 80% of the vegetable oil will come from soybean oil. The change means that approximately 4 million tons of soybean oil will be utilized this year to make biodiesel.

The vegetable oil can come from any number of sources, but no other source has the volume and efficiency of soybean oil. Brazilian law specifies that soybean oil cannot make up more than 80% of the vegetable oil used to make biodiesel. The goal is to source the other 20% from primarily small family farmers as a way to supplement their income. If the legislation had not placed a limit on soybean oil, virtually 100% of the vegetable oil would come from soybeans.

The crushing industry has been pushing for the increase as a way to better utilize their excess biodiesel capacity. The industry contends that there is still enough excess capacity to support a much higher blend. They support blends in urban areas as high as B20 (20% vegetable oil blended into petroleum diesel). Health officials in Brazil also support a higher blend as a way to reduce harmful emissions and the resulting adverse health impacts.